Republicans Oppose Property
Tax Cuts in State Budget

By MIKE TORRALBA

ANNAPOLIS - A House committee performed surgery Wednesday on Gov. Robert Ehrlich's budget proposal, cutting some of his legislative plans and slicing the property tax increase he imposed in his first year in office.

The committee cut $103 million from the $12.2 billion general fund. All told, the surgery was minor -- barely 1 percent of the account paying for public schools, health, public safety, human resources and other day-to-day activities. But that sliver of cash is what the General Assembly and the governor will spend the remaining weeks of the legislative session haggling over, budget experts said.

Under the revised budget, the state property tax rate would fall by a nickel to 8 cents per $100 dollars of assessed value.

Ehrlich increased the rate to balance the budget two years ago.

The cut is made affordable mostly by rising property assessments, said Warren Deschenaux, policy analysis director for the nonpartisan Department of Legislative Services.

Most of the committee's Republicans opposed cutting the property tax rate. Delegate Adelaide C. Eckardt, R-Dorchester, said she worried that near-record oil prices could put a damper on the economy and leave state coffers wanting.

Some of Ehrlich's legislative proposals received cuts or were resculpted:

-- $4 million in cuts to the $6 million appropriation the Republican governor wanted for tax credits to lure movie studios to film in Maryland.

-- Restoration of $350,000 of $375,000 cut by Ehrlich from Baltimore's lead-poisoning prevention program.

-- The governor's Office for Children, Youth and Families was gutted.

Ehrlich decried such moves as "shenanigans" at Wednesday's meeting of the Board of Public Works.

The committee amended the budget to close the $38 million gap in health benefits for employees and retirees of state government but scaled back the governor's cost-of-living raise for state workers.

Some 400 state positions will be eliminated, mostly by way of the governor's budget. About 150 of the positions to be cut are currently filled.

"All the cuts were tough to make," said House Speaker Michael Busch, D-Anne Arundel.

The committee's Republicans disagreed with many of the amendments passed by the Democratic majority.

"This budget pretty much has micromanaged the governor," Eckardt said. "This is governing through the budget."

Despite the cuts, the revamped budget proposal does little to address the fact that the state is spending money faster than it is earning it, Deschenaux said.

He estimated the state now faces a $750 million budget shortfall -- although it would have been larger if revised revenue estimates released bu the state comptroller's office this week hadn't covered some of the gap.

If that figure sounds familiar, it's because the state was projected around this time last year to face a larger deficit. But the hole turned out to be smaller than predicted, largely thanks to the improving economy.

The general fund doesn't include higher education, federal funds and special funds for specific projects, such as land preservation -- the remainder of Ehrlich's $25.9 billion operating budget.

And those figures don't include funding for public-school construction -- most of which comes out of the capital budget, which the Appropriations Committee will tackle later this week.

The General Assembly is expected to cut more than $250 million from the overall budget, Deschenaux said.

The revised budget is expected to reach the House floor on Friday but won't be debated on until Monday, said committee chairman Norman Conway, D-Wicomico